If government spending decreases, the long-run income effect on net exports and consumption will be the same as in the baseline case.

Name: If government spending decreases, the long-run income effect on net exports and consumption will be the same as in the baseline case.
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Government spending decreases, leading to a decrease in aggregate demand. This decrease in aggregate demand will lead to a decrease in output and income. The decrease in income will lead to a decrease in consumption and net exports.

If Government Spending Decreases, the Long-Run Income Effect on Net